We propose and experimentally test a mechanism for a class of principal-agent problems in which agents can observe each others' efforts. In this mechanism each player costlessly assigns a share of the pie to each of the other players, after observing their contributions, and the final...

We study intermediaries who seek to maximize gains from trade in bilateral negotiations. Intermediaries are players: they cannot commit to act against their objective function and deny, in some cases, trade they believe to be beneficial. This impairs their ability to assist the parties relative...

How agents assess the (in-)tangible externalities that others might impose on them can strongly influence strategic interaction. This study explores mechanism design for agents whose externality assessments and private payoffs, exclusive of externalities, are all subject to asymmetric...

This paper introduces ambiguous transfers to study the (partial) implementation problem. We show that under all profiles of utility functions, any efficient allocation rule is implementable via an individually rational and budget-balanced mechanism with ambiguous transfers, if and only if the...

We describe a simple 2-stage mechanism whereby for two bargainers, a Buyer and a Seller, it is a weakly dominant strategy to report their reservation prices in the 1st stage. If the Buyer reports a higher price than the Seller, then the referee announces that there is the possibility for trade,...

In this paper, we examine the optimal mechanism design of selling an indivisible object to one regular buyer and one publicly known buyer, where inter-buyer resale cannot be prohibited. The resale market is modeled as a stochastic ultimatum bargaining game between the two buyers. We fully...

We consider the problem where agents bargain over their shares of a perfectly divisible commodity. The aim of this paper is to identify the class of bargaining solutions induced by dominant strategy implementable allocation rules. To this end, we characterize the class of dominant strategy...

This paper experimentally analyzes the effects if signatories to an international environmental agreement (IEA) apply different voting schemes to determine the terms of the agreement. To this end, unanimity, qualified majority voting, and simple majority voting are compared with respect to the...

We study contracting and costly renegotiation in settings of complete, but unverifiable information, using the mechanism-design approach. We show how renegotiation activity is best modeled in the fundamentals of the mechanism-design framework, so that noncontractibility of renegotiation amounts...